'We can't build our businesses around the cycle' warns Millwater

Willis president Grahame Millwater said the mega-broker is bracing itself for no increase in rates for at least another two years.

Millwater, speaking at the Insurance Times Global Leaders Forum last week, predicted the market was unlikely to turn until the beginning of 2013.

Millwater believed the soft market will drive greater consolidation, but argued the industry needed to get its head around organic growth. “We can’t build our businesses around the cycle, we have to build it around long-term, sustainable growth,” he said.

Lloyds TSB managing director for insurance in financial institutions, Bill Cooper, told the forum that private equity companies that had borrowed cheaply off the banks in the boom years would come under pressure to make repayments in 2012 and 2013, driving venture capital-backed insurance companies to either float, sell up or merge. Another option for leveraged companies was the bond markets, which were “hot” for stable returns from the insurance industry, he said.